We have gathered the week’s most important crypto-industry news.
- Media: Binance behind Hong Kong crypto exchange HKVAEX.
- Kraken will provide the U.S. Internal Revenue Service with customer data.
- Binance filed a new motion to dismiss the CFTC lawsuit.
- Fireblocks hired a former NYDFS official to help develop products.
Media: Binance behind Hong Kong crypto exchange HKVAEX
Launched in December 2022, the HKVAEX platform plans to apply for a license from the Hong Kong Securities and Futures Commission. According to informed sources, the SCMP reports, the exchange’s founder is Binance.
HKVAEX was created as a separate legal entity in the Hong Kong Special Administrative Region, under BX Services Limited. Sources say the entities share resources, and the platform’s website uses Binance servers to load content.
Representatives of the platforms denied the SCMP’s allegations. The existence of an independent exchange in Hong Kong amid rising regulatory pressure abroad could help Binance take advantage of a jurisdiction that seeks to play a larger role in the global crypto industry, journalists note.
In August 2023, HashKey launched trading Bitcoin and Ethereum to the public after obtaining a license from the SFC. Earlier, applications were filed by the Bitcoin exchanges Huobi, OKX and OSL.
Kraken will provide the U.S. Internal Revenue Service with user data
The Bitcoin exchange Kraken will provide IRS information about U.S. users who conducted transactions exceeding $20,000 between 2016 and 2020. The company will comply with the court order.
The platform will have to disclose names, dates of birth, physical addresses, phone numbers and Tax ID numbers of users.
On the company’s site, it says that the IRS initially demanded a broader range of records and data, including IP addresses, employment information and sources of funds.
«Kraken persuaded the court to substantially reduce the number of affected clients and the amount of information to be disclosed. However, authorities required disclosure of profiling information and transaction histories for a specific group of users», — the document states.
The agency NYDFS filed the corresponding petition in February 2023, when Kraken settled charges brought by the SEC. The company at the time noted that one of the platform’s guiding principles is ensuring user safety and privacy.
In April, the company filed a lawsuit against the IRS. Kraken rejected the agency’s right to obtain customer information and described the demands as an “unwarranted treasure hunt.”
Binance filed a new motion to dismiss the CFTC complaint
Binance filed in court an amended complaint to dismiss the CFTC’s case, which it described as “incendiary.” Company representatives said the Commission is trying to police the world by taking action against a platform that sought to avoid doing business in the United States.
«The CFTC relies on new, broad arguments that would enable it to regulate any activity in cryptocurrency (or other assets) related to derivatives anywhere in the world. U.S. law governs domestic policy. […] Congress did not turn the CFTC into a global derivatives police force», — the statement says.
On March 27, 2023, the regulator CFTC accused the trading platform of violating derivatives trading rules and operating without a license. The agency also contends that the company knew its clients included sanctioned individuals.
In July, Binance filed a response in the context of the motion to dismiss the CFTC’s case, arguing that the Commission exceeded its powers by suing the exchange.
The filing states that the case targets foreign individuals and entities who reside and operate outside the United States, and some of the regulator’s allegations do not meet legal standards.
Fireblocks hired a former NYDFS official to assist in product development
Crypto custody provider Fireblocks has hired the former Deputy Superintendent for Virtual Currency at the NYDFS Peter Marton. The specialist will focus on building programmable compliance products on the basis of blockchain.
Joining the company also is Chaitanya Reddy Konda. She is known as the creator of the L2 solution for Ethereum named Nightfall, developed by Polygon and Ernst & Young. At Fireblocks she will take the role of Senior Product Manager for Digital Identity and Privacy.
In September the crypto custody provider acquired control of the BlockFold tokenisation platform for $10m, according to Bloomberg. The latter specialises in TradFi-related tokenisation and smart-contract development.
Also on ForkLog:
- HTX (formerly Huobi) posted net profit of $98 million for July–September.
- Binance appointed head of CEE and Central Asia regions.
- Binance UK chief resigned amid regulatory pressure.
- Binance will discontinue servicing Visa debit card in Europe.
- BlockFi completed preparations for bankruptcy.
- Grayscale will launch indices for the crypto market.
What to read this weekend?
FTX is weighing whether to reorganise the crypto exchange with a partner, operate on its own, or seek a buyer. An initial offer to acquire the company could surface on December 16.
The large claims against the platform in OTC trades reached about 52 cents on the dollar. The catalyst was expectations of higher creditor recoveries.